South Africa watchdog approves $900 million Sinopec, Chevron deal

JOHANNESBURG (Reuters) – China’s Sinopec Corp got a major boost in its pursuit of Chevron’s South Africa and Botswana assets after South Africa’s Competition Tribunal approved, with conditions, the $900 million transaction on Friday.

FILE PHOTO: The Sinopec logo is seen at one of its gas stations in Hong Kong April 26, 2010. REUTERS/Bobby Yip/File Photo

State-owned Sinopec was competing for the assets against commodities trader and miner Glencore, which swooped in last October with a $973 million bid following delays to Sinopec’s original agreement.

The transaction is subject to Sinopec investing 6 billion rand ($504 million) over five years to develop a refinery in South Africa’s Western Cape, over and above Chevron’s current investment plans, the Tribunal said in a statement.

The Tribunal also said there should be no retrenchments as a result of the proposed transaction.

As part of the deal, Sinopec will buy a 75 percent share in Chevron’s South African subsidiary that runs the 100,000 barrel per day refinery, a lubricants plant in Durban and 820 petrol stations and other oil storage facilities.

The deal also includes 220 convenience stores across South Africa and Botswana.